Title 102 | Chapter 001 | Regulation 370
SUPERSEDED
This document is no longer current.
FINANCE AND ADMINISTRATION CABINET
Teachers’ Retirement System
(New Administrative Regulation)
102 KAR 1:370.Annuitization and disbursement from supplemental benefit.
Section 1.
Definition. (1) "TRS 4 members" means those individuals who establish membership in the retirement system on or after January 1, 2022.Section 2.
Upon retirement or subsequently, members may elect to annuitize into a lifetime monthly retirement allowance the total contributions to the supplemental benefit component in accordance with the actuarial assumptions and methods adopted by the board and in effect at the time of the member's retirement date. Members may also elect to annuitize a portion of the contributions to the supplemental benefit component and either receive a disbursement of the remaining contributions or leave the remaining balance in the supplemental benefit component to be accredited regular interest in accordance with KRS 161.220(13)(c). Members may not elect an annuity that provides a retirement allowance of less than $100 per month unless that retirement annuity represents an annuitization of all the contributions to the supplemental benefit component.Section 3.
Upon retirement or subsequently, members may request distribution of all contributions to the supplemental benefit component, partial disbursements or leave all or part of the contributions in the supplemental benefit component to be accredited interest in accordance with KRS 161.220(13)(c). Partial disbursements shall be in amounts not less than $5,000 unless the remaining balance is less than $5,000.BRENDA MCGOWN, Chairperson
APPROVED BY AGENCY: June 17, 2024
FILED WITH LRC: July 12, 2024 at 3:30 p.m.
PUBLIC HEARING AND COMMENT PERIOD: A public hearing on this administrative regulation shall be held on 24 September 2024, at 9:00 a.m. Eastern Time at the offices of the retirement system at 479 Versailles Road, Frankfort, Kentucky. Individuals interested in being heard at this hearing shall notify this agency in writing by five workdays prior to the hearing, of their intent to attend. If no notification of intent to attend the hearing was received by that date, the hearing may be cancelled. A transcript of the public hearing will not be made unless a written request for a transcript is made. If you do not wish to be heard at the public hearing, you may submit written comments on the proposed administrative regulation. Written comments shall be accepted through 30 September 2024. Send written notification of intent to be heard at the public hearing or written comments on the proposed administrative regulation to the contact person.
CONTACT PERSON: Robert B. Barnes, Deputy Executive Secretary of Operations and General Counsel, Kentucky Teachers' Retirement System, 479 Versailles Road, Frankfort, Kentucky 40601, phone (502) 848-8508, fax (502) 573-0199, email Beau.Barnes@trs.ky.gov.
REGULATORY IMPACT ANALYSIS AND TIERING STATEMENT
Contact Person:
Robert B. Barnes
(1) Provide a brief summary of:
(a) What this administrative regulation does:
Establishes the process for, and rules of, annuitization and disbursement from the supplemental benefit component for TRS 4 members.
(b) The necessity of this administrative regulation:
It will provide further details for the annuitization of, and disbursement from, the supplemental benefit component.
(c) How this administrative regulation conforms to the content of the authorizing statutes:
KRS 161.635 and 161.636 establish a supplemental benefit component for TRS 4 members that permits annuitization of and disbursements from that account. This regulation provides further details for the annuitization and disbursements of account funds.
(d) How this administrative regulation currently assists or will assist in the effective administration of the statutes:
KRS 161.635 and 161.636 establish a supplemental benefit component for TRS 4 members that permits annuitization of and disbursements from that account. This regulation provides further details for the annuitization and disbursement of account funds.
(2) If this is an amendment to an existing administrative regulation, provide a brief summary of:
(a) How the amendment will change this existing administrative regulation:
N/A.
(b) The necessity of the amendment to this administrative regulation:
N/A.
(c) How the amendment conforms to the content of the authorizing statutes:
N/A.
(d) How the amendment will assist in the effective administration of the statutes:
N/A.
(3) List the type and number of individuals, businesses, organizations, or state and local governments affected by this administrative regulation:
Individuals who become active, contributing members with the retirement system on or after January 1, 2022. There are currently approximately 12,788 members in this tier.
(4) Provide an analysis of how the entities identified in question (3) will be impacted by either the implementation of this administrative regulation, if new, or by the change, if it is an amendment, including:
(a) List the actions that each of the regulated entities identified in question (3) will have to take to comply with this administrative regulation or amendment:
The members will not have to take any overt action.
(b) In complying with this administrative regulation or amendment, how much will it cost each of the entities identified in question (3):
There will be no cost to the members of the retirement system.
(c) As a result of compliance, what benefits will accrue to the entities identified in question (3):
Members will have details of annuitization of and disbursements from the supplemental benefit component clearly set forth in regulation.
(5) Provide an estimate of how much it will cost the administrative body to implement this administrative regulation:
(a) Initially:
There is no cost to implement this regulation.
(b) On a continuing basis:
There is no continuing cost.
(6) What is the source of the funding to be used for the implementation and enforcement of this administrative regulation:
Administrative expenses of the retirement system are paid by restricted agency funds.
(7) Provide an assessment of whether an increase in fees or funding will be necessary to implement this administrative regulation, if new, or by the change if it is an amendment:
There is no increase in fees or funding required.
(8) State whether or not this administrative regulation establishes any fees or directly or indirectly increases any fees:
This regulation does not establish any fees or directly or indirectly increase any fees.
(9) TIERING: Is tiering applied?
Tiering is not applied, as all TRS 4 members are treated the same.
FISCAL IMPACT STATEMENT
(1) Identify each state statute, federal statute, or federal regulation that requires or authorizes the action taken by the administrative regulation.
KRS 161.310, 161.220(13), 161.635, and 161.636.
(2) Identify the promulgating agency and any other affected state units, parts, or divisions:
Teachers’ Retirement System
(a) Estimate the following for the first year:
Expenditures:
None
Revenues:
None
Cost Savings:
None
(b) How will expenditures, revenues, or cost savings differ in subsequent years?
No change.
(3) Identify affected local entities (for example: cities, counties, fire departments, school districts):
None.
(a) Estimate the following for the first year:
Expenditures:
None
Revenues:
None
Cost Savings:
None
(b) How will expenditures, revenues, or cost savings differ in subsequent years?
No change.
(4) Identify additional regulated entities not listed in questions (2) or (3):
(a) Estimate the following for the first year:
Expenditures:
None
Revenues:
None
Cost Savings:
None
(b) How will expenditures, revenues, or cost savings differ in subsequent years?
No change.
(5) Provide a narrative to explain the:
(a) Fiscal impact of this administrative regulation:
None.
(b) Methodology and resources used to determine the fiscal impact:
No impact.
(6) Explain:
(a) Whether this administrative regulation will have an overall negative or adverse major economic impact to the entities identified in questions (2) - (4). ($500,000 or more, in aggregate)
This regulation will not have an overall negative or adverse major economic impact.
(b) The methodology and resources used to reach this conclusion:
There is no impact.
FINANCE AND ADMINISTRATION CABINET
Teachers’ Retirement System
(New Administrative Regulation)
102 KAR 1:370.Annuitization and disbursement from supplemental benefit.
Section 1.
Definition. (1) "TRS 4 members" means those individuals who establish membership in the retirement system on or after January 1, 2022.Section 2.
Upon retirement or subsequently, members may elect to annuitize into a lifetime monthly retirement allowance the total contributions to the supplemental benefit component in accordance with the actuarial assumptions and methods adopted by the board and in effect at the time of the member's retirement date. Members may also elect to annuitize a portion of the contributions to the supplemental benefit component and either receive a disbursement of the remaining contributions or leave the remaining balance in the supplemental benefit component to be accredited regular interest in accordance with KRS 161.220(13)(c). Members may not elect an annuity that provides a retirement allowance of less than $100 per month unless that retirement annuity represents an annuitization of all the contributions to the supplemental benefit component.Section 3.
Upon retirement or subsequently, members may request distribution of all contributions to the supplemental benefit component, partial disbursements or leave all or part of the contributions in the supplemental benefit component to be accredited interest in accordance with KRS 161.220(13)(c). Partial disbursements shall be in amounts not less than $5,000 unless the remaining balance is less than $5,000.BRENDA MCGOWN, Chairperson
APPROVED BY AGENCY: June 17, 2024
FILED WITH LRC: July 12, 2024 at 3:30 p.m.
PUBLIC HEARING AND COMMENT PERIOD: A public hearing on this administrative regulation shall be held on 24 September 2024, at 9:00 a.m. Eastern Time at the offices of the retirement system at 479 Versailles Road, Frankfort, Kentucky. Individuals interested in being heard at this hearing shall notify this agency in writing by five workdays prior to the hearing, of their intent to attend. If no notification of intent to attend the hearing was received by that date, the hearing may be cancelled. A transcript of the public hearing will not be made unless a written request for a transcript is made. If you do not wish to be heard at the public hearing, you may submit written comments on the proposed administrative regulation. Written comments shall be accepted through 30 September 2024. Send written notification of intent to be heard at the public hearing or written comments on the proposed administrative regulation to the contact person.
CONTACT PERSON: Robert B. Barnes, Deputy Executive Secretary of Operations and General Counsel, Kentucky Teachers' Retirement System, 479 Versailles Road, Frankfort, Kentucky 40601, phone (502) 848-8508, fax (502) 573-0199, email Beau.Barnes@trs.ky.gov.
REGULATORY IMPACT ANALYSIS AND TIERING STATEMENT
Contact Person:
Robert B. Barnes
(1) Provide a brief summary of:
(a) What this administrative regulation does:
Establishes the process for, and rules of, annuitization and disbursement from the supplemental benefit component for TRS 4 members.
(b) The necessity of this administrative regulation:
It will provide further details for the annuitization of, and disbursement from, the supplemental benefit component.
(c) How this administrative regulation conforms to the content of the authorizing statutes:
KRS 161.635 and 161.636 establish a supplemental benefit component for TRS 4 members that permits annuitization of and disbursements from that account. This regulation provides further details for the annuitization and disbursements of account funds.
(d) How this administrative regulation currently assists or will assist in the effective administration of the statutes:
KRS 161.635 and 161.636 establish a supplemental benefit component for TRS 4 members that permits annuitization of and disbursements from that account. This regulation provides further details for the annuitization and disbursement of account funds.
(2) If this is an amendment to an existing administrative regulation, provide a brief summary of:
(a) How the amendment will change this existing administrative regulation:
N/A.
(b) The necessity of the amendment to this administrative regulation:
N/A.
(c) How the amendment conforms to the content of the authorizing statutes:
N/A.
(d) How the amendment will assist in the effective administration of the statutes:
N/A.
(3) List the type and number of individuals, businesses, organizations, or state and local governments affected by this administrative regulation:
Individuals who become active, contributing members with the retirement system on or after January 1, 2022. There are currently approximately 12,788 members in this tier.
(4) Provide an analysis of how the entities identified in question (3) will be impacted by either the implementation of this administrative regulation, if new, or by the change, if it is an amendment, including:
(a) List the actions that each of the regulated entities identified in question (3) will have to take to comply with this administrative regulation or amendment:
The members will not have to take any overt action.
(b) In complying with this administrative regulation or amendment, how much will it cost each of the entities identified in question (3):
There will be no cost to the members of the retirement system.
(c) As a result of compliance, what benefits will accrue to the entities identified in question (3):
Members will have details of annuitization of and disbursements from the supplemental benefit component clearly set forth in regulation.
(5) Provide an estimate of how much it will cost the administrative body to implement this administrative regulation:
(a) Initially:
There is no cost to implement this regulation.
(b) On a continuing basis:
There is no continuing cost.
(6) What is the source of the funding to be used for the implementation and enforcement of this administrative regulation:
Administrative expenses of the retirement system are paid by restricted agency funds.
(7) Provide an assessment of whether an increase in fees or funding will be necessary to implement this administrative regulation, if new, or by the change if it is an amendment:
There is no increase in fees or funding required.
(8) State whether or not this administrative regulation establishes any fees or directly or indirectly increases any fees:
This regulation does not establish any fees or directly or indirectly increase any fees.
(9) TIERING: Is tiering applied?
Tiering is not applied, as all TRS 4 members are treated the same.
FISCAL IMPACT STATEMENT
(1) Identify each state statute, federal statute, or federal regulation that requires or authorizes the action taken by the administrative regulation.
KRS 161.310, 161.220(13), 161.635, and 161.636.
(2) Identify the promulgating agency and any other affected state units, parts, or divisions:
Teachers’ Retirement System
(a) Estimate the following for the first year:
Expenditures:
None
Revenues:
None
Cost Savings:
None
(b) How will expenditures, revenues, or cost savings differ in subsequent years?
No change.
(3) Identify affected local entities (for example: cities, counties, fire departments, school districts):
None.
(a) Estimate the following for the first year:
Expenditures:
None
Revenues:
None
Cost Savings:
None
(b) How will expenditures, revenues, or cost savings differ in subsequent years?
No change.
(4) Identify additional regulated entities not listed in questions (2) or (3):
(a) Estimate the following for the first year:
Expenditures:
None
Revenues:
None
Cost Savings:
None
(b) How will expenditures, revenues, or cost savings differ in subsequent years?
No change.
(5) Provide a narrative to explain the:
(a) Fiscal impact of this administrative regulation:
None.
(b) Methodology and resources used to determine the fiscal impact:
No impact.
(6) Explain:
(a) Whether this administrative regulation will have an overall negative or adverse major economic impact to the entities identified in questions (2) - (4). ($500,000 or more, in aggregate)
This regulation will not have an overall negative or adverse major economic impact.
(b) The methodology and resources used to reach this conclusion:
There is no impact.